Islamic Development Bank Grants

The Islamic Development Bank (IsDB) is a major multilateral financier for its 57
member countries across the Middle East, Africa, and Asia. For municipalities in
OIC member states, it is an essential partner — but its instruments and
principles differ from Western lenders in ways you must design for.

WHAT MAKES IsDB DISTINCT
IsDB finance is SHARIA-COMPLIANT. Rather than conventional interest-bearing
loans, it uses Islamic finance instruments such as istisna'a (construction
financing), ijara (leasing), murabaha (cost-plus sale), and istisna'a-ijara
combinations for infrastructure. It also administers grant and concessional
windows, including through the Islamic Solidarity Fund for Development, for
poverty reduction and human development.

WHAT IsDB FUNDS
- Economic and social infrastructure: transport, energy, water, and urban
services.
- Human development: education, health, and skills.
- Agriculture, food security, and rural development.
- SME finance, value chains, and job creation.
- Capacity building and technical assistance.

WHAT IsDB EXPECTS
Projects must serve a member country's development priorities and are processed
through the national government and the IsDB Governor (usually the finance or
economy ministry). IsDB values regional solidarity, sustainability, and
demonstrable development impact. Strong project preparation, feasibility
evidence, and the government's commitment to the financing structure are
essential.

HOW TO POSITION YOURSELF
Work through your national IsDB focal point early, and design the project with
the appropriate Islamic finance modality in mind from the start — retrofitting a
conventional loan structure later wastes time. Emphasise human-development and
solidarity dimensions, and be ready to show how the investment is both
financially sound and socially beneficial.